Implications:  Existing home sales continued to move forward in January after rebounding sharply in December, hitting the second fastest pace of sales since February 2007.  Sales of previously owned homes rose 0.4% in January to a 5.47 million annual rate and are up 11% from a year ago.  Back in November existing home sales suddenly dropped.  As we explained at the time, it was due to new federal "Know Before You Owe" rules, which lengthened the settlement process, pushing more closings into December.  Now we're likely seeing a "clean" number, or one that is no longer influenced by the new rule, which is why robust sales for January is welcome news.  Remarkably, the solid sales figure for January was achieved even though inventories remain very low, down 2.2% from a year ago.  The months' supply of existing homes – how long it would take to sell the current inventory at the most recent selling pace – is only 4.0.  According to the National Association of Realtors anything less than 5.0 months is considered tight supply.  In the year ahead, look for higher home prices to lure "on-the-fence" sellers into the market, boosting inventory.  The median price for an existing home is up 8.2% from a year ago.  In other housing news this morning, the national Case-Shiller index increased 0.8% in December and was up 5.4% in 2015, an acceleration from the 4.5% home price gain in 2014.  Home price increases in 2015 were led by Portland, San Francisco, and Denver.   On the manufacturing front, the Richmond Fed index, which measures mid-Atlantic factory sentiment, fell to -4 in February from +2 in January.  Good housing numbers and soft manufacturing are consistent with continued Plow Horse growth.

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